WASHINGTON – Orders to U.S. factories unexpectedly fell in April for a second month, pointing to a deceleration in manufacturing as the global economy cools.
Bookings dropped 0.6 percent after a revised 2.1 percent decrease in March, the first back-to-back declines in more than three years, figures from the Commerce Department showed Monday.
Economists projected a 0.2 percent gain, according to the median forecast in a Bloomberg News survey.
Slowdowns in Europe and parts of Asia combined with a cooling in business spending in the U.S. following a reduction in a government tax credit may limit manufacturing this year.
A falloff in hiring may also be causing American households to curb spending on big-ticket items like autos, eliminating another source of strength.
Were in a period now where the economy is cooling, said Robert Dye, chief economist at Comerica Inc. in Dallas, who projected orders would drop. Businesses are getting more defensive as they think about the uncertainty they face the rest of this year.
Estimates for total factory orders in the Bloomberg survey of 61 economists ranged from a decline of 1 percent to an increase of 1.1 percent. The Commerce Department revised the March figure from a previously estimated 1.9 percent decrease.
The last time bookings decreased in consecutive months was in January and February 2009.
Excluding transportation equipment, factory orders fell 1.1 percent in April after a 0.7 percent decrease the previous month.
Bookings for durable goods, those meant to least at least three years, were unchanged in April, less than the 0.2 percent gain the government reported on May 24.
Demand for non-durable goods dropped 1.1 percent.